Inclusive finance and rural youth
This study (PDF) by IFAD analyses inclusive finance and rural youth through cutting-age research with new insights and approaches that have emerged over the years in the field. The overall narrative clearly documents the ways in which rural youth engage with the economy, policy and institutions and identifies the rapid changes occurring across the globe as well as the opportunities and challenges that young people living in rural areas encounter in their different livelihoods. Within this context, financial inclusion has gained attention as a key contributing factor to unlock the potential of rural youth in driving sustainable and inclusive rural transformation. Although evidence is still limited, a market system approach appears to be a viable solution to advance financial inclusion for rural youth and to ensure systemic change in the long term. The proposed approach is intended to provide guidance, best practices and investment opportunities. At the micro level, funders and practitioners can support innovative service providers to develop products adapted for segments (e.g. rural youth) that otherwise would not be served. Donors, investors and development agencies can play the critical role of facilitator in the effort to build a financial system and sound market infrastructure through subsidized funding aimed at promoting innovation, competition and evidence-based research. The opportunity to strengthen the market system at the macro level is evident and imperative. Although it requires a long-term perspective, funders and the development community must engage with policymakers and regulators to craft regulation and supervision that spur innovation and inclusion by balancing youth financial inclusion, stability, integrity and consumer protection. These interventions are likely to benefit the entire population. This premise is particularly relevant to interventions that address rural barriers, such as insufficient infrastructure and dispersed population. Finally, it is important to note that a market system approach may be difficult to implement by any stakeholder alone, as it requires coordination of multiple actors across the entire ecosystem.